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Topic 8: taxation and E-commerce
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This topic introduces the issues of taxation and electronic commerce. E-commerce has revolutionised the way companies operate in the market-place. Previously, it was necessary for a company to have  a physical presence in a market. Now, customers in a specific country can be targeted by an e-tailer, even though the e-tailer is located in another country and has no physical presence in the customer’s country. Taxation traditionally requires the tax authority to have jurisdiction over the company. This jurisdictional requirement is usually satisifed through the physical presence of the company in the territory of the taxing State.
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Introduction - Tax issues in Cyberspace

E-commerce is a tremendous economic revolution. If it is to be successful, taxation of e-commerce companies must not thwart this development. E-commerce negates the physical differences between the sale of goods, the provision of a service and the use of intangible assets such as intellectual property through licensing and assignation. All of these activities are taxable to some extent.
Tax Law Principles
Taxation regimes, in order to be acceptable to the population at large must be consonant with the following legal principles, viz.,

Neutrality
The tax rules must be non-discriminatory in their approach to taxpayers and taxable products. Thus, foreign and domestic profits are to be taxed equally. This concept is based on [horizontal] equity.  
 

Efficiency
The compliance burden should be set at the minimum level possible. This burden should be low for both the taxpayer and the tax administration authority. The law must be easily complied with and easy to collect, otherwise the law is not observed and a law that is not observed by the majority of the population ceases to be a true law and loses moral, political and legal authority.

Certainty and Simplicity
An e-commerce businesses, whilst not having a permanent establishment, nevertheless still benefits from local services provided by the host State. However, e-commerce companies that are attempting to enter a market obtain benefits in that country and then when it builds up enough customer and brand loyalty will then decide to have a permanent establishment. When is it that the foreign company should be taxed by the taxing state?

Effectiveness and fairness
Taxation levels should be appropriate and tax evasion and avoidance should be minimised as much as possible.
Tax authorities should not have excess jurisdiction that leads to ineffective enforcement. Secondly, it is not appropriate for a tax authority to impose taxes which it cannot collect.
 
 Consistency with the conceptual base for sharing the tax  base
 Both countries will have a convincing case for taxing the  entity involved. This claim must be legally, politically and  morally justifiable.

 Compatibility with international trade rules
 Any domestic tax regime must be compatible with bilateral  and multilateral tax treaties applicable to that State and  indeed the general princ本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。